August 28, 2026

The key test is whether charities gain more in additional donations than governments lose in revenue. Academic estimates vary wildly. Although some are bullish and suggest that donations can exceed lost revenue, some recent studies are more equivocal. In 2024 Daniel Hungerman of the University of Notre Dame and his co-authors found that, if the government uses tax reliefs to make the cost of giving 10% cheaper, it incentivises donors to give only 6% more on average. The state gives up more than charities gain.